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Goldman Drops Despite Giant Beat; Coke Fizzles; Tesla Stalls

Dan Berman
Hot Stock Minute

Stocks fell into the red today, with the S&P and Nasdaq both ending eight-day winning streaks. The drop came despite a report from the National Association of Home Builders which showed July homebuilder confidence climbing to its highest level since January 2006. Meanwhile, the Federal Reserve said industrial production rose 0.3% in June ahead of estimates for 0.2%. Separately, the consumer price index climbed more than predicted in June. The Department of Labor says consumer prices rose 0.5% for the month. Expectations had been for a rise of 0.4%. CPI rose 0.1% in May.

Goldman Sachs (GS) gets the gold so far for the biggest beat among the big banks. The company earned $3.70 a share for the quarter when expectations were for $2.82. Those profits are approximately double what they were for the same quarter a year ago. Still, shares wound up falling over 1.5% today upon realization that the strong report stemmed from returns on the bank's own investments. Such activity will be limited under the Volcker rule portion of the Dodd-Frank act.

Coca-Cola (KO) had more fizzle today than fizz, falling nearly 2% on its quarterly earnings. The company met estimates making 63-cents a share. But it missed on revenue posting $12.75 billion versus $12.959 billion. Coca-Cola is blaming cool and wet weather in various pockets of the world for lackluster sales. It is also citing weakness in the global economy. The company expects sales to improve in the second half of the year, though it says foreign exchange rates are likely to hurt earnings by 4%.

Johnson & Johnson (JNJ) was largely unchanged despite posting earnings of $1.48 a share when estimates were for $1.39. Revenue was $17.9 billion beating expectations of $17.713 billion. The company's medical devices and diagnostics unit posted sales growth of nearly 10% with help from the recent acquisition of Synthes. Revenue at the smaller consumer arm were up about 1%. J&J has also upped its full year outlook by two to five cents.

Tesla (TSLA) tumbled 14% on a warning from Goldman Sachs. Analyst Patrick Archambault gives the automaker a price target of $84. Shares had been trading at $126 before falling more than $10 today. Prior to today, the stock had been up more than 250% since the start of 2013.

Gambling equipment-maker SHFL (SHFL) hit the jackpot. Bally announced today that's buying the company for $1.31 billion in cash, sending the stock more than 20% higher. Bally says SHFL complements its existing product portfolio. SHFL's products include automatic card shufflers and electronic table games.

Cintas (CTAS) shares fell nearly 2% after the uniform maker missed estimates when it reported after yesterday's closing bell. Cintas says it earned 19-cents a share when expectations were for 20-cents. The company matched on revenue at $1.13 billion. The real problem here was lowered guidance. Cintas says uncertainty over the economy has caused many companies to hold off on hiring, so there's less demand for its products. The CEO pointed to the new health care law as one hurdle. Cintas is up 21% year-to-date, and set a new 52-week high yesterday before releasing the report.

Joe's Jeans (JOEZ) got torn apart today losing over 20% on the release of its quarterly earnings yesterday afternoon. The company says it made 2-cents a share when analysts expected 3-cents. Revenue was also below estimates, just shy of $31 million. Despite the miss, revenue was up 8% from a year ago. Separately, the company announced that it's buying competitor Hudson Clothing in a deal for almost $100 million. Prior to today's drop, shares were up 84% year-to-date.